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Residential downtowns missing some residents

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February 22, 2013

By: Agata Miszczyk

Agata Miszczyk

After becoming deserted wastelands past 6 p.m., cities nationwide have embarked on a two-decade effort to revitalize downtowns. From coast to coast, projects aimed to spur both economic and social vitality in metropolitan area core’s, with residential development as a driving force. A Brookings Institute study stated that “by definition, a downtown recovery means more residents.” The same Brookings study reported that from 1990 to 2000 the number of households living in downtown increased by 13 percent. This trend has continued in the last 12 years.

Minnesota’s downtowns are experiencing the same phenomenon — especially Minneapolis and St. Paul. A lot has happened in both downtowns in the last two decades, or is currently being planned, including the new Vikings Stadium, Lowertown Ballpark, RiverFirst, St. Paul Farmer’s Market, and Lowertown Lofts. While these projects have certainly improved both downtowns — though arguably Minneapolis has some advantages compared to St. Paul — something is still missing, and that is the residential population.

In 2011, Minneapolis announced its Downtown 2025 plan—one of its goals being to double the residential population and create new housing and amenities such as grocery stores. Similarly, St. Paul has also actively been working at increasing its residential appeal with creating more housing and opening up new shops and restaurants. The St. Paul 2015 plan is geared toward downtown evolving into a “full-service residential neighborhood."

In reality, however, these ambitious plans for residential downtowns are missing something. The two maps below show that neither downtown is very densely populated. In fact, most blocks within the downtowns have no occupied units, whether they be rental or owned. The blocks that do have some residential population have a lower percentage of homeowners than surrounding areas. This correlates with the fact that most housing in the two downtowns is rental condominiums or apartments in high rise buildings.

Why does this matter one might ask? Many studies and cities have shown that having a strong residential base in downtown can be significant in transforming it. A Yale University study showed that homeownership can be integral to neighborhood stability and revitalization. Homeowners are more willing to invest in the property and its surroundings, and therefore create a better overall environment for both residents and visitors. This same study also claims that city governments are more invested in areas where there are residents and provide more services (such as green space, transit, and other public infrastructure) to these areas. There are only so many ballparks, stadiums, malls, and bars, we can build in downtown. I think we are at a point now, especially in Minneapolis, where there is an increased need and want for housing and downtown living.

However, home ownership isn’t the only factor in attracting more residents. Both downtowns are slowly developing a different kind of residential base.

In Minneapolis, new luxury apartment buildings seem to be springing up everywhere. Ongoing housing projects include a new 26-story luxury building at 5th Street and Nicollet Mall, a high-end apartment building on 5th Street and Marquette Avenue and most recently, yet another new building is slated for 103 N. 2nd St. In St. Paul, the story is similar. Lowertown Lofts are clearly geared towards a higher-income buyer, as are the Lofts at Farmers Market, and new projects such as Penfield at 10th and Minnesota is also labeled as “high-end housing.”

The Minneapolis downtown residential population rose 7 percent to 36,500 in 2012 and St. Paul’s “residential population is growing at a rapid pace.” While this is great news, a residential downtown does not just mean luxury apartments and complexes. In order to create residential areas in downtown that spur vitality, “a vast array of moderate and high density housing at both market rate and affordable levels” needs to be encouraged. Thus far, neither downtown has been encouraging such affordable development. This is, of course, a huge undertaking. The state and federal money available to invest in affordable housing is severely limited, and it is very difficult to build affordable housing in expensive areas like downtown. On top of that, the luxury condo and rental market is thriving in both Minneapolis and St. Paul and developers are paying top prices for development sites.

While the market for these high-end spaces may not be saturated yet, eventually it will be. Additionally these types of spaces are not providing our downtowns with much diversity and do not create that array and mix of housing that is recommended by numerous vitality indicators. Construction companies, investment, and projects are still solely focusing on luxury units or high-end housing. A need for diverse downtown housing is present in both downtown plans — St. Paul’s Downtown Development Strategy is interested in “adding a mix of housing types and price ranges“ and Minneapolis’s Downtown 2025 also stresses a need for market-value as well as affordable housing.

In order to continue making the Twin Cities a vibrant community, downtown residential projects need to be implemented that serve all populations and income levels. The downtown residential market needs to move toward more opportunities for homeownership, and perhaps implementing a few more affordable options. This type of variety will not only create more livable communities but will also help in the downtown revitalization movement.

Agata Miszczyk is an undergraduate research fellow with MN2020, a nonpartisan, progressive think tank focused on education, health care, transportation and economic development.